What is a Lady Bird deed in Michigan?

A Lady Bird deed (enhanced life estate deed) lets a Michigan homeowner keep full control of their home during life, including the right to sell or refinance, while passing it automatically to named beneficiaries at death outside probate.

What are the disadvantages of a Lady Bird deed in Michigan?

It covers only the one property, doesn't address incapacity the way a trust does, can create co-ownership disputes if multiple beneficiaries are named, and must be drafted and recorded correctly to be effective.

Is a Lady Bird deed better than a trust in Michigan?

Usually they work together rather than one replacing the other. A trust handles the full estate, multiple assets, and incapacity; a Lady Bird deed is a low-cost way to pass a single home outside probate. Many Michigan plans use both.

Lady Bird Deeds in Michigan: Cost, Pros & Cons, vs. a Trust

By Moshe B. Newman, Attorney · Published June 2026

The Lady Bird deed — formally an enhanced life estate deed — is one of the most useful and most misunderstood tools in Michigan estate planning. Michigan is one of only a handful of states that recognizes it. Done right, it passes your home to your loved ones outside probate while leaving you in complete control during your life. Done wrong, or used in the wrong situation, it can cause problems. Here’s what you need to know.

What a Lady Bird deed does

A Lady Bird deed splits ownership of your home in an unusual way. During your life you keep an enhanced life estate — meaning you can live in the home, rent it, mortgage it, or even sell it and cancel the deed entirely, all without anyone’s permission. When you die, whatever interest remains passes automatically to the people you named (the “remainder” beneficiaries), outside probate.

The advantages

Avoids probate on the home — it transfers automatically at death.
You keep full control — unlike a traditional life estate, you don’t need the beneficiaries’ consent to sell or refinance.
Medicaid estate recovery — because the property passes outside probate, a Lady Bird deed can help shield the home from Michigan’s Medicaid estate recovery, an important consideration for long-term-care planning.
Step-up in basis — beneficiaries generally receive the home with a stepped-up tax basis, which can reduce capital gains if they later sell.
Low cost — it’s a single deed, far cheaper than some alternatives.

The limits and risks

It only covers the one property it’s recorded against — it is not a substitute for a full estate plan.
It doesn’t help with incapacity the way a trust does.
If you name multiple beneficiaries who don’t get along, you’ve handed them shared ownership and a potential dispute.
It must be drafted and recorded correctly — a defective deed can fail exactly when it’s needed, or cloud the title.

Lady Bird deed vs. a trust

People often ask whether a Lady Bird deed replaces a trust. Usually it doesn’t — it complements one. A trust handles your full estate, multiple assets, incapacity, and complex distributions; a Lady Bird deed is a clean, low-cost way to pass a single home outside probate. Many Michigan plans use both: the trust as the core, the Lady Bird deed on the house. Which combination is right depends on your assets and goals.

Getting it right

Because a Lady Bird deed interacts with Medicaid planning, taxes, title, and the rest of your estate plan, it’s worth having it drafted as part of a coherent plan rather than in isolation. If you’re weighing one for your home, we can tell you whether it fits your situation and draft it correctly.

This article is general information about Michigan law, not legal advice, and does not create an attorney-client relationship. Laws and dollar thresholds change; figures current as of 2026. For advice on your specific situation, schedule a consultation.

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